EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828154
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Reliance Worldwide Pty Ltd applied for a TCO in respect of certain composite multilayer pipe on 26 August 2008.
Instrument
TCO No 0828154 was made on 14 November 2008. It declares that those certain composite multilayer pipe are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0828154 is taken to have come into force on 26 August 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0828154, enacted under the Customs Act 1901, addresses the problem of ensuring that certain goods not produced domestically receive preferential tariff treatment. This legislation allows for the application of lower customs duties on specified goods, which are not produced in Australia in the ordinary course of business. The instrument was introduced to provide tariff relief for these goods, thereby supporting industries reliant on imported materials. The enacting body is the Chief Executive Officer of Customs, who must assess whether an application for a tariff concession meets the criteria outlined in the Act. The policy objective is to facilitate the importation of goods that are not domestically produced, thereby promoting competitive markets and supporting Australian industries that depend on these imports.
The Instrument No. 0828154, published on 14 November 2008, applies to certain composite multilayer pipe, setting the rate of duty at free, following a successful application by Reliance Worldwide Pty Ltd on 26 August 2008. The CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria for a tariff concession. No objections were received during the consultation period, and the tariff concession became effective from the date the application was lodged, providing a benefit to importers eligible for duty refunds on goods imported since the commencement date.
Scope and Application
The Customs Act 1901, as amended, provides the legislative framework for the imposition of customs duties on goods imported into Australia and includes provisions for tariff concessions. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can lower the rate of customs duty on specified goods. The application of a TCO hinges on the CEO's determination that no substitutable goods are being produced in Australia in the ordinary course of business at the time the application is lodged. Once a TCO is issued, it applies retroactively from the date the application was made, and benefits any importers who have already paid duty on the specified goods, potentially allowing them to claim a refund. This process ensures that Australian industries are not unfairly disadvantaged by the imposition of customs duties on imported goods, provided no suitable domestic alternatives exist. The Act's application extends nationally, covering all imported goods subject to customs duty, with no specific exclusions outlined in the explanatory statement beyond those goods that cannot be subject to a TCO under section 269SJ.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0828154, under the Customs Act 1901, focus on the facilitation of reduced customs duty rates for specific goods through the issuance of Tariff Concession Orders (TCOs). Section 269F (1) of the Act permits an application to the Chief Executive Officer of Customs (CEO) for a TCO in relation to certain goods. The CEO is obligated to consider these applications and make a decision based on whether the application meets the core criteria set out in section 269C of the Act, specifically whether substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must issue a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, which outlines the applicable duty rates. For example, TCO No. 0828154 specifies that certain composite multilayer pipe are subject to item 50 of the Tariff, with the rate of duty for these goods set at free, as opposed to the general rate of 5%.
The obligations under the Customs Act 1901 for the parties involved are quite straightforward. The CEO is required to ensure that any TCO applications are assessed against the criteria set out in the Act. This includes considering submissions from any interested parties and making a decision based on the evidence presented. Once a TCO is issued, it is imperative that the CEO and relevant stakeholders ensure that the reduced duty rates are correctly applied to the specified goods. Additionally, under subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting submissions from the public, although no submissions were received in response to the TCO No. 0828154.
In terms of consequences for non-compliance, the Customs Act 1901 does not explicitly outline offences, penalties, or specific consequences for breaching the provisions of a TCO. However, general provisions of the Act and associated regulations may apply. Any breach of the Customs Act or associated regulations could potentially lead to civil or criminal penalties, including fines or imprisonment, depending on the nature and severity of the breach. The exact penalties would be determined based on the relevant sections of the Customs Act and the specific circumstances of the non-compliance. For example, fraudulent claims or misrepresentation in an application for a TCO could attract penalties under sections related to false statements or fraud in the Act.